Milk has a "denaturing" effect on gluten, making it more "slippery" resulting in a softer "crumb" and smaller holes. Both powdered and regular milk achieve this, but the difference is the liquid content has to be accounted for in the recipe that only calls for powdered milk.

It's not a big deal which one you use, but merely using a little forethought in producing the proper stiffness to the dough during mixing. It's easier to adjust when kneading by hand, but you can also do it in the machine if you test the amount of spring when lightly pressing on the surface of the dough when it's in the knead cycle. When it's dimpled by your finger, is should spring back at least half way.

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"Food is our common ground, a universal experience." - James Beard

Bread machines typically use instant yeast, so no proofing necessary, but if you use regular yeast and proof it in milk (which I've never heard of) I'm pretty sure you would need to scald the milk like I mentioned earlier. At least King Arthur recommends scalding, so it doesn't affect the yeast, but some people say you don't need to scald pasteurized milk. When I used regular milk instead of dry I scalded the milk. Maybe someone needs to do a comparison.

Bread machines typically use instant yeast, so no proofing necessary, but if you use regular yeast and proof it in milk (which I've never heard of) I'm pretty sure you would need to scald the milk like I mentioned earlier. At least King Arthur recommends scalding, so it doesn't affect the yeast, but some people say you don't need to scald pasteurized milk. When I used regular milk instead of dry I scalded the milk. Maybe someone needs to do a comparison.

I have made all kinds of bread dough using a bread machine. I have used milk, sour cream and milk, water, powdered buttermilk, dry milk, buttermilk, potato water...I don't bake the bread in the machine. I don't like the crust. So, I guess I use mine like you'd use a mixer with a dough hook. I find as I get older, kneading is harder to do, so I use the machine to mix the dough. I made a whole-wheat french bread yesterday. Bread machines can cut the cost of bread and you control the ingredients. I think the DH figured out that his "daily" bread costs about 50 cents/loaf with the cost of the electricity and the ingredients. Now, electricity rates, flour, etc. have gone up in price since he figured this out...might be $1 now.

Thank you, CW!
I've always wondered if someone ever did an actual price comparison. I might have to go back to making my own loaves again. I got lazy after the initial wow factor wore off and only make half a dozen (or so) loaves in my machine per year now. I'm all for saving a buck though.

I have made all kinds of bread dough using a bread machine. I have used milk, sour cream and milk, water, powdered buttermilk, dry milk, buttermilk, potato water...I don't bake the bread in the machine. I don't like the crust. So, I guess I use mine like you'd use a mixer with a dough hook. I find as I get older, kneading is harder to do, so I use the machine to mix the dough. I made a whole-wheat french bread yesterday. Bread machines can cut the cost of bread and you control the ingredients. I think the DH figured out that his "daily" bread costs about 50 cents/loaf with the cost of the electricity and the ingredients. Now, electricity rates, flour, etc. have gone up in price since he figured this out...might be $1 now.

I got it in hopes of saving money, and have occasionally been making my own bread off and on. It does save money. I got the bread maker in hopes of saving time too. We will see how it pays off. I got it for $3 so I think I should be able to make that up in about 2 loves